The distressed asset investment landscape in India has come of age and the time is ripe for discerning investors to step in and pick “value” assets. Over the last two years, there has been a remarkable change in the resolution process for non-performing loans (NPLs) on banks’ balance sheets. While India has had a fair share of stressed assets at regular intervals, investors have stayed away from the space in the absence of robust legal, regulatory and resolution frameworks. Distressed asset investments are exciting because of their inherent “buy low-sell high” potential and low correlation to other asset classes. To some investors, especially large corporate strategic ones, the current situation seems like a once-in-a-lifetime opportunity to expand capacity cost-effectively. A number of the resolution plans submitted to the NCLT involve big companies looking to strategically acquire large stressed capacities at discounted rates. The Reserve Bank of India (RBI) has come up with two lists that target a total of Rs.4.06 trillion of the total Rs.8.77 trillion of outstanding NPLs.

(Live Mint)